Government urges sick people excluded from private insurance to enroll in program, announcing up to 40 percent rate cuts in some states and easier eligibility.

06/02/2011 | By Tammy Worth

The Obama administration announced this week that the federally run insurance plan for people with pre-existing conditions will be less expensive and easier to qualify for, beginning July 1.

The Pre-existing Condition Insurance Plan, or PCIP, provides insurance coverage to people in the private market who have been denied insurance due to conditions including rheumatoid arthritis, obesity, coronary artery disease and lupus. PCIP launched in January as part of the Patient Protection and Affordable Care Act. It serves as a bridge to 2014, when the new health exchanges open in each state, and offer insurance options for everyone, without discrimination based on health status.

Arthritis Foundation President and CEO John H. Klippel, MD, joined Kathleen Sebelius, secretary of the U.S. Department of Health and Human Services, or HHS, for the announcement on May 31. Dr. Klippel expressed strong support. “These changes will offer more Americans with pre-existing conditions an option to access the care they need without the discrimination that has occurred against those who have debilitating, expensive diseases like rheumatoid arthritis, which currently affects nearly 2 million Americans,” he said.

Making PCIP plans more affordable and lowering the application requirements may increase enrollment, which has been relatively low. About 18,000 people have joined the program, which was expected to cover approximately 350,000 participants through 2014. Some states, specifically Hawaii, Maine, North Dakota and West Virginia, have fewer than 30 people enrolled.

Sebelius said HHS will increase outreach for the program through various measures, such as working with insurers when an application is denied.

The new eligibility rules, however, may mean fewer people with pre-existing conditions will be denied by private insurers. Previously, an applicant had to a provide letter of denial from an insurance carrier to qualify for PCIP. Now, all that is required is a note from a doctor, physician’s assistant or nurse practitioner confirming a pre-existing illness.

The Obama administration announced this week that the federally run insurance plan for people with pre-existing conditions will be less expensive and easier to qualify for, beginning July 1.

The Pre-existing Condition Insurance Plan, or PCIP, provides insurance coverage to people in the private market who have been denied insurance due to conditions including rheumatoid arthritis, obesity, coronary artery disease and lupus. PCIP launched in January as part of the Patient Protection and Affordable Care Act. It serves as a bridge to 2014, when the new health exchanges open in each state, and offer insurance options for everyone, without discrimination based on health status.

Arthritis Foundation President and CEO John H. Klippel, MD, joined Kathleen Sebelius, secretary of the U.S. Department of Health and Human Services, or HHS, for the announcement on May 31. Dr. Klippel expressed strong support. “These changes will offer more Americans with pre-existing conditions an option to access the care they need without the discrimination that has occurred against those who have debilitating, expensive diseases like rheumatoid arthritis, which currently affects nearly 2 million Americans,” he said.

Making PCIP plans more affordable and lowering the application requirements may increase enrollment, which has been relatively low. About 18,000 people have joined the program, which was expected to cover approximately 350,000 participants through 2014. Some states, specifically Hawaii, Maine, North Dakota and West Virginia, have fewer than 30 people enrolled.

Sebelius said HHS will increase outreach for the program through various measures, such as working with insurers when an application is denied.

The new eligibility rules, however, may mean fewer people with pre-existing conditions will be denied by private insurers. Previously, an applicant had to a provide letter of denial from an insurance carrier to qualify for PCIP. Now, all that is required is a note from a doctor, physician’s assistant or nurse practitioner confirming a pre-existing illness.

PCIP has features and a structure similar to many private insurance plans. It offers three tiers of coverage, with variations in premiums, deductibles and copays for primary and specialty care (with in-network and out-of-network pricing), hospital care and prescription drugs.

In July, premiums will be reduced in 18 states, with cuts ranging from about 2 percent in Mississippi up to 40 percent in Florida, Arizona, Alabama, Kentucky and Virginia. For example, a 50-year-old enrolled in Florida's standard could pay $270 a month, with a $2,000 medical deductible and separate deductibles for medications – $500 for formulary drugs and $750 for non-formulary drugs.

PCIP is available nationally, and the plans are federally run in certain states and the District of Columbia; other states opted to run their plans using federal funds. HHS has sent a “letter of guidance” to the 27 state-run programs, encouraging them to make similar changes by recalculating premiums and easing eligibility rules, said Richard Popper, a director at the HHS Center for Consumer Information and Insurance Oversight.

A key enrollment criterium that has not changed is the waiting period. Before applying, an applicant has to have been without insurance for six months – a long time for those who have pre-existing conditions that need close monitoring, continuous treatment or other care, which has to be paid out of pocket in full without insurance coverage. People with rheumatoid arthritis, or RA, for example, risk permanent joint damage from uncontrolled systemic inflammation if their disease is active and they go without medication. Some of the most effective disease-modifying drugs for RA are the biologic injections and infusions, which can cost more than $1,000 a month.

More information about the Pre-existing Condition Insurance Plan is available online at www.pcip.gov. The site gives information on programs in each state, how to apply and benefits available.New premium costs for each state can be found at www.pcip.gov/PCIP_States.html.